GAO Report Validates PSC Objections to  Defense Department’s Progress Payments Rule

Arlington, Va. (June 28, 2019) — A June 27 Government Accountability Office (GAO) report to Congress on the Department of Defense’s (DoD) contract financing policies validates the Professional Services Council’s (PSC) objections to the performance-based and progress payments rule. 

The GAO report also reviewed DoD’s August 2018 proposed rule that would have changed the DoD content and process for calculating contractor progress and performance-based payments. GAO concluded that until DoD conducts a current and comprehensive assessment of the effects of defense contractor financings, DoD would not be in a position to understand whether current or future contract financing policies are achieving their intended objective. 

“We welcome the GAO report and its conclusion validating our position that DoD lacked sufficient data and rationale to support the radical changes it proposed last August to its progress and performance-based payments rules,” said Alan Chvotkin, PSC Executive Vice President and Counsel, “and we compliment the current DoD leadership for acknowledging that shortfall and accepting the GAO’s recommendation.” 

PSC strongly objected to the DoD August 2018 proposed rule and provided a statement in opposition to it at a September 2018 public meeting. In October 2018, DoD withdrew that proposed rule and subsequently conducted a number of public listening sessions to gather additional input, where PSC provided additional oral comments on the proposal. 

Regarding the recent GAO report, Chvotkin stated: “This comprehensive assessment should not just be an update to the old data. With the significant changes taking place in the defense market—driven in part by DoD’s own actions—any assessment must take into account the likely characteristics of the defense marketplace over the next decade before proposing any changes to DoD’s contract finance policies.”    

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Media Contact: 
Ashlei Stevens
Director, Media Relations
703.875.8974 | stevens@pscouncil.org 
About PSC: PSC is the voice of the government technology and professional services industry. PSC’s more than 400 member companies represent small, medium and large businesses that provide federal agencies with services of all kinds, including information technology, engineering, logistics, facilities management, operations and maintenance, consulting, international development, scientific, social, environmental services, and more. Together, the trade association’s members employ hundreds of thousands of Americans in all 50 states. Follow PSC on Twitter @PSCSpeaks. To learn more, visit www.pscouncil.org.